Shopper Data Is the Key to Sizzling Up Long-Term Success
By Susan Viamari
You’ve heard the saying: Everything is better with bacon (sorry, vegetarians!). Well, in the CPG world, everything is better with shopper data. Why? Because the key to CPG success is making – and keeping – shoppers happy.
Gulp, no small task there! With 128 million households in the U.S. and multiple shoppers in many of those households, that’s a lot of shoppers. So, which shoppers do you need to keep happy? Which shoppers are most important to your brand’s success? Without shopper data, is there any way to answer these important questions?
With loyalty data, understanding your most valuable shoppers becomes much easier. With the right technology, you can even use loyalty data to find more shoppers that look like your current most valuable shoppers, and that’s an awesome way to grow your shopper base. Still, loyalty data is not being fully leveraged in the way it could and should be in the marketplace today.
According to Progressive Grocers’ 2019 Tech Trends report, 27 percent of grocers indicate that a lack of rich customer data is a key issue. This is a big miss if you are a CPG brand or retailer.
Loyalty data provides transaction-level detail, and this is the most granular insight on retailers’ shoppers. You can understand shopper behavior and trip trends within a particular retail banner. Basket analytics, also based on loyalty data, allow suppliers and retailers to work together to hone assortment to highest-potential customers – all the way down to the store level.
That’s pretty powerful stuff. But there are other, less obvious, benefits to be reaped by properly mining shopper data. For instance, you can:
- Understand if and how promotions impact target shopper segments: Are the promotions driving increased penetration or cannibalization? Are they encouraging trial and repeat across target shoppers?
- Assess distribution: Are your products in the stores where they have a right to win, based on the store’s shopper profiles?
- Gain a holistic view of assortment: Are high-loyalty items maintaining ideal shelf space? What does cross-purchase behavior look like? How about switching?
- Shopper insights provide critical data on trends, opportunities and threats across several marketing levers:
These types of insights produce powerful results. Suppliers that integrate loyalty insights with point-of-sale data consistently outgrow those who don’t by more than four percentage points.
Sure, the thought of harnessing, analyzing and acting upon loyalty card data can be overwhelming. There are seemingly countless loyalty cards out in the CPG universe today, and the data behind many of these cards are stored in isolated silos. But it’s not something you need to go at alone (at IRI, we’ve integrated data from more than 550 million loyalty cards onto IRI Liquid Data).
Here’s just one example of a major turnaround for a brand and retailer prompted by loyalty insights:
Our team was working with a bacon supplier to analyze performance. The preliminary analysis revealed that the supplier and the bacon category were losing households and trips following the delisting of four of the supplier’s items at a large retailer. The dollar impact of these losses was significant – a $1.6 million decline for the supplier and a $900,000 decline for the retailer during a 12-week period.
The IRI team turned to loyalty data to understand more about the loss and how to reverse the trend. Looking specifically at the one retailer, the team found that supplier’s penetration and trips at this retailer were down 76 percent, with one-quarter of those households purchasing nothing from the retailer during the latest 13-week period. In other words, delisting bacon was also resulting in many lost baskets at the retailer – not just lost bacon sales.
Susan Viamari is Principal, Collaborative Gateway Solutions, IRI.